Why the Dollar is good for Panama

April 1, 2008 - PRLog -- Investors, tourists and executives visiting Panama does not have to worry about the currency conversion as the government of Panama uses the U.S. dollars as its core national currency. However, the government calls the currency as Balboa for keeping the nationalistic flavor on the notes.

The US dollar has been Panama’s prime currency since 1904, following an agreement between the U.S and the Panama government. Since than, the U.S. dollars dominated Panama’s overall macroeconomic policy instruments.

In a way, Panama’s economy is unique. Panama does not print its own currency because it does not have a central bank. Government spending and investment largely depend on tax revenues, non-tax revenues and borrowings. Thus, creditworthiness of the Panama government is directly linked to the public finances.

As Panama has a small economy, not having a self-governing monetary policy does not create much of a problem. The government handles the situation effectively. Moreover, in the time of ‘dollarization’, this became a huge advantage in favor of Panama.

As Panama uses the U.S. dollar as the legal tender, every chances of currency exchange risk are eliminated. As a result, foreign companies do not hesitate in investing here.

When investing in Panama, foreign companies do not have to convert the currency twice. Additionally, Panama has no restrictions on the outflow of capital or outward direct investment, making at an ideal place to invest.

It has been proved that Panama's economy is one of the healthiest in Latin America and stood strong during the past financial crisis in the continent.

Panama has managed to maintain an annual inflation rate of below two percent for the last 40 years. In 2005, the inflation was 2.3 percent, one of the lowest in many years.

All these factors make Panama an ideal place for investment and a great place for relaxing.

For more information on Panama investments please go to;
http://www.knightsbridgeinvest-panama.com

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Knightsbridge Investment Group offers investment properties for discerning individuals around the world. Providing the foreign investor with a large selection of properties, Knightsbridge is a comprehensive knowledge source for real estate including all legal and financial aspects involved in purchase.

Website: www.knightsbridgeinvest-panama.com/